OptionsHouse

Options Trading News

October 16, 2013  Wed 3:16 AM CT

ABT: SEE CHART GET CHAIN FIND STRATEGIES
Abbott Laboratories drew put buying yesterday ahead of its earnings report this morning.

optionMONSTER's Depth Charge system shows that 12,200 October 31 puts were purchased for the ask price of $0.04 yesterday. This is clearly a new position, as open interest in the strike was just 291 contracts before the trade appeared.

The puts were not tied to any corresponding stock trades identified by our systems. The delta of the options is just 0.06, suggesting that there is just a 6 percent probability that they will be in the money upon expiration at the end of this week. The trader could be making an outright bearish bet or hedging a long position. (See our Education section)

ABT was down 0.85 percent to $33.71 yesterday after bouncing off support at $33 last week. The drug maker hasn't been below $31 since the end of 2012.

More than 24,000 ABT options changed hands yesterday, about 5 times its daily average for the last month.
Share this article with your friends


OptionsHouse

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

Sweet Spot Exceptions

As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

View more education articles »